UK moves closer to joining major Trans-Pacific trade bloc

21 Mar '24

3 min read

Pic: Adobe Stock

Insights

The UK edges closer to joining the CPTPP, with the Trade Act receiving Royal Assent, aiming for membership by year's end.
This move will eliminate tariffs for over 99 per cent of UK exports to CPTPP countries, boosting access to the Indo-Pacific market and supporting job creation.
Ratification steps are underway, with Japan and Singapore already on board.

The UK is now on the verge of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as the new Trade (CPTPP) Act has received Royal Assent. This development paves the way for the UK to become part of the expansive trade group by the end of this year, following its initial agreement in July to join the CPTPP, which boasts a combined GDP of £12 trillion (approximately $15.3 trillion) in 2022, representing a substantial 15 per cent of the global economy.

This strategic move will make the UK the first European nation to join the CPTPP, and the first new member since the partnership was established. A pivotal advantage noted is the eligibility of over 99 per cent of current UK goods exports to CPTPP countries for zero tariffs, a benefit that will encompass key exports.

This agreement opens doors to the Indo-Pacific region, which is forecast to be at the forefront of global growth and home to nearly half of the world's middle-class consumers in the upcoming decades. It is seen as a critical opportunity for British businesses to tap into new markets, streamline export processes, and support job creation.

Following the Royal Assent, the next steps involve passing technical secondary legislation to ensure the UK's readiness for ratifying its accession to the CPTPP as swiftly as possible. The UK government aims to formally accept the terms signed last year with New Zealand, serving as the CPTPP depository, by mid-July 2024.

For the agreement to take effect, other CPTPP member countries must also complete their domestic ratification processes, with six approvals needed for the agreement to be binding. To date, Japan and Singapore have completed their ratification processes.

Business and trade secretary Kemi Badenoch said: “I am delighted that the CPTPP Bill has become law—a major step towards the UK becoming a full-fledged member of the Indo-Pacific bloc and the many benefits that will come with that membership.

“We are leveraging our freedoms as an independent trading nation to open-up a new era of partnership with the fast-growing economies of tomorrow. Becoming a member of CPTPP offers brilliant new opportunities for British businesses and consumers through greater access to a market of over 500 million people—helping to grow the UK economy.”

“This is exciting news for British businesses up and down the country. My message to the British business community is clear – start looking now at what this deal can do for you, so you are ready to take full advantage of the brilliant opportunities it presents when the deal comes into force,” said Minister of State for Trade Policy Greg Hands.

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